11–18 of 18 posts
Steve Jobs earns $1 a year though Well, yeah, but god knows what he makes in bonuses, and his stock options are out of control. Not to mention the stock he owns, and its rising value (the past month notwithstanding).
What's your position after the acquisition? CEO? Lead Developer? Founders shouldn't get too much special consideration-- they should be paid a fair rate for the position they'll be filling. Presumably the extra consideration for your startup is baked into the cash/stock part of the deal.
Why would they stay?
It really depends on the state of the company and potential earn outs, etc. So it is completely dependent on the situation. I have personally taken less than market value. I would never do that again. I would suggest that a founders value is much higher to the acquiring company than it is to the market. Hence a higher market value. On the other hand you are worth what you negotiate. Their job is to negotiate the best…
On earn-out, I've never seen a company actually hit their earn-out numbers. IMHO, they're usually set up to get the management or shareholders to accept a smaller valuation than they would otherwise. And the earn-out numbers are usually based on the best-case scenarios being presented by the company being acquired. ;) The scenarios were somewhat unrealistic, especially considering the major disruption of going through an acquisition, and possibly increased levels of big-company-bullshit it may take to get sales closed. In some cases, the fictional earnout values were obvious face saving measures for executives and the board.
Steve Jobs earns $1 a year though Well, yeah, but god knows what he makes in bonuses, and his stock options are out of control. Not to mention the stock he owns, and its rising value (the past month notwithstanding).
There are also tax reasons to heavily overweight his compensation in stock options. See IRC § 162(m)
The paying price for your company and your post-transaction salary are separate issues. You wouldn't agree to be acquired for less than you feel your company is worth so why agree to become an employee for less than you feel you're worth.
And don't discount the other kinds of value a larger company can provide. Different positions, your working schedule (4 day week?), company car, etc... Now is the time to ask for what you want.
What's your position after the acquisition? CEO? Lead Developer? Founders shouldn't get too much special consideration-- they should be paid a fair rate for the position they'll be filling. Presumably the extra consideration for your startup is baked into the cash/stock part of the deal.
No special consideration for founders? Why would they stay?
Earlier quoted context omitted.
No special consideration for founders? Why would they stay?
The importance of "stay" is in the context of the acquiring company, not the acquired one.
What's your position after the acquisition? CEO? Lead Developer? Founders shouldn't get too much special consideration-- they should be paid a fair rate for the position they'll be filling. Presumably the extra consideration for your startup is baked into the cash/stock part of the deal.
No special consideration for founders? Why would they stay?
They usually DON'T stay. But when they do, it's usually due to stock option vesting plans.